Payment at Termination Law
“If an employer willfully fails to pay, without abatement or reduction, in accordance with Sections 201, 201.3, 201.5, 201.6, 201.8, 201.9, 202, and 205.5, any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days."STATUTE
“If an employer willfully fails to pay, without abatement or reduction, in accordance with Sections 201, 201.3, 201.5, 201.6, 201.8, 201.9, 202, and 205.5, any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days. An employee who secretes or absents themselves to avoid payment to them, or who refuses to receive the payment when fully tendered to them, including any penalty then accrued under this section, is not entitled to any benefit under this section for the time during which the employee so avoids payment.”
PURPOSE
The purpose of section 203 is to compel the prompt payment of earned wages. Its design is to protect the employee and to promote the welfare of the community.
WILLFULNESS
To be at fault within the meaning of the statute, the employer’s refusal to pay need not be based on a deliberate evil purpose to defraud [employees] of wages which the employer knows to be due. As used in section 203, ‘willful’ merely means that the employer intentionally failed or refused to perform an act which was required to be done.
The word “willful” as ordinarily used in civil courts, does not necessarily imply anything blamable, or any malice or wrong toward the other party, or perverseness or moral delinquency, but merely that the thing done or omitted to be done, was done, or omitted intentionally. It amounts to nothing more than this: That the person knows what he is doing, intends to do what he is doing, and is a free agent.
However, inadvertence and clerical error denotes behavior that is accidental, not deliberate. Where an employer’s failure to pay wages to an employee when those wages are due is a result of a “mistake,” it is typically not considered willful.
PENALTY
Section 203 subdivision (a) provides that if an employer willfully fails to pay the wages of an employee who is discharged or who quits, “the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid.” This provision has been interpreted to mean the penalty is an amount equal to the employee’s daily wages for each day … that the wages are unpaid. Penalties accrue not only on the days that the employee might have worked, but also on non-workdays. Thus, if an employee’s daily wage is $300, the proper waiting time penalty for 30 days is equal to $9,000. Do you think your employer failed to pay you final wages in a timely manner, then calculate your estimated Section 203 “waiting-time penalties” here.
According to the DLSE, “Payment of the wages or the commencement of an action stops the penalty from accruing. Filing a complaint in court commences an action. An employee’s filing a claim with the Division of Labor Standards Enforcement (DLSE) is not considered the filing of an action, and does not stop the penalty from accruing.”
Even the failure to pay a few dollars can trigger the penalty. Thus, Section 203 “waiting-time penalties” is a powerful tool for enforcing timely wage-payment obligations against employers.